> That' assuming houses don't go up in price though right?

No, it isn’t. You can invest your savings. If you had put $2,500.00 a month into SPY500 since October 2009 (15 years ago) you’d have $1,388,302.13 today.

https://dqydj.com/sp-500-periodic-reinvestment-calculator-di...

> Also I think it's pretty rare for people to have the mental fortitude to save 2.5k a month for a house on top of living expenses, rent, and trying to build your retirement / savings / emergency fund.

How is saving for a house “on top of” literally “saving”? If you can save for retirement, savings, and emergencies then you have the mental fortitude to save for a house. People are bad with money, we know that. One of the best examples is buying a house they can’t afford.

> It's definitely possible but I think it's out of reach for the average person.

Yes, agree.

Yeah, I just think examples like this need to work for the masses in order to be useful otherwise they're just pie in the sky advice like abstinence to prevent childbirth. It does work and it's 100% effective but humans are horny. Same with saving this amount of money, there's a select few that can pull it off but most are incapable. Those are the people advice is for

I don’t disagree with you. But I was replying to this question:

> So how does one buy a house without being dependent on cash flow?

The answer to which is “you don’t”.

Most people can’t afford to buy a house and never will. Even many homeowners.

I will spell it out if it isn’t already clear.

Live within your means and save as much as you can, investing that savings in a diversified portfolio. Buy a home only when your savings allow for it.

> Most people can’t afford to buy a house and never will

Most homes in America are owned by the person who lives there.

Just because you buy something doesn’t mean you can afford it.

If you can’t retire or pay medical expenses or maintain your physical and emotional wellbeing because you spent money on a house then you couldn’t afford it. Owning a house doesn’t mean you can pay the property taxes or maintenance costs.

My point is that people are making financially unsound home buying purchases.

Another way to say this is that Bugatti doesn’t sell Veyrons to people with $1,000,000.00. Bugatti sells Veyrons to people with an extra $1,000,000.00.

And it’s not particularly close. ~65% of households own their home.

That rate is higher now than in the 50s, 60s, 70s, 80s or 90s. It rofl stomps the pre-war era.

Do you have a full dataset on this? All I could find is https://fred.stlouisfed.org/series/RHORUSQ156N which only goes back to 1965.

The datasets and collection methodologies have changed overtime, the Fred one is the best if you want continuous definitions.

The census also collects data on the subject https://www.census.gov/data/tables/time-series/dec/coh-owner....

Now I’m curious how homeownership numbers shifted over that time. This is the portion of homes owned by their residents, not the number of owned homes as a portion of total population. I’m also curious what the income and wealth to home ratios are. Looks like I have a weekend project.

My bet is simple: Boomers are all at retirement age if we use the cap of 1954, they were basically given land during the post-war boom. Many had a lifetime career so there was no need to constantly hustle and move about to get a comfortable life. Home ownership is likely very top heavy for Boomers and older Gen X as a result.

If that's even in the ballpark we're going to see a lot of assets aquired by insurance and hospitals to pay off the final years and this residential ownershio will torpeo.

The census bureau has looked at this. The Reagan years hit boomers hard causing their percentage of homeownership to drop compared to a similar age cohort historically. Then 2008 wrecked the young boomers and gen x similarly.

In general terms the oldest cohort has steadily advanced in home ownership (I’d guess due to our welfare for the aged that isn’t needs based and better old age health, not land gifts but who knows). So there is definitely a trend of the oldest age cohort increasing its homeownership % while the other cohorts decrease.

But for the under 35 crowd today, they own their own home at a higher percentage than boomers or gen x did when they were in that cohort.

There is also the consideration that the US is just older than it’s ever been. I’m not a demographer do I have no idea how that plays out.

https://www.census.gov/housing/hvs/data/charts/fig07.pdf

The pre-war/post war duality is easy to understand. The US made it official policy to increase homeownership. The government subsidizes housing for all income levels and there was tons of housing built.

The post-war era has seen only minor changes in homeownership rates. And those tend to be around macro economic events like 2008 and Covid (and the Reagan era mortgage rates woof).

Thanks that’s very interesting. Why was pre-war homeownership low? Did more people rent their homes?

Yes. And there was much more variation in the types of housing. Employer provided forms/bunk houses, flop houses, tenements, boarding houses, etc.

Importantly the quality of the housing was in many cases horrendous.

>Live within your means and save as much as you can

It's expensive being poor and the job market isn't getting better to compensate this economy. If you rent forever you spend more than someone paying off a mortgage (only amortized by needing to upkeep the house youself). If you're wokrking your back out everyday you're more likely to pay more insurance and medical bills than the cushy white collar job with proggresion options.

Most people don't even have the $1000 rainy day fund. They are 3 steps removed from the thought of a "diversified portfolio".

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